Are Markets Fighting The Fed?
There are several sayings on Wall Street. One of them is “Don’t fight the Fed”, but markets seem to be doing exactly that. Morgan Stanley Managing Director, Lisa Shalett believes the US equity market is fighting the Fed, ignoring leading economic indicators, and that could mean pain for overly optimistic positions down the road.
Fed Watch: Markets Diverge From Fed Signaling
The Fed raised rates 25bps after the first FOMC of the year, which markets were expecting, but CME Group Fed Futures data shows that markets are breaking from the Fed’s forecasting for the rest of year.
September FOMC Brings Expected Rate Hike And Unexpected Market Slide
While investors and expected and saw the Fed raise interest rates 75bps after the September FOMC meeting, Powell's rhetoric in his speech afterward kicked off a major market sell off.